Tax Tip: Roth IRA Contribution Rules

Income:To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:

$160,000 — Married Filing Jointly

$10,000 — Married Filing Separately (and you lived with your spouse at any time during the year)

$110,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse during the year).

Age:There is no age limitation for Roth IRA contributions. Unlike traditional IRAs, you can be any age and still qualify to contribute to a Roth IRA.

Contribution Limits:In general, if your only IRA is a Roth IRA, the maximum 2003 contribution limit is the lesser of your taxable compensation or $3,000 ($3,500 for those age 50 or over). The maximum contribution limit phases out if your modified adjusted gross income is within these limits:

$150,000-$160,000 — Married Filing Jointly

$0-$10,000 — Married Filing Separately (and you lived with your spouse at any time during the year)

$95,000-$110,000 — Single, Head of Household, or Married Filing Separately (and you did not live with your spouse)

Contributions to Spousal Roth IRA:You can make contributions to a Roth IRA for your spouse provided you meet the income requirements.

When to Make Contributions?Contributions to a Roth IRA can be made at any time during the year or by the due date of your return for that year (not including extensions).